Harare City Council says the introduction of the interbank exchange rate has left the local authority in a fix as it was now battling to break even in water provision.
By Xolisani Ncube
Town clerk Hosiah Chisango said council had, in January, budgeted water provision at the 1:1 rate against the United States dollar, but the central bank has since deregulated the exchange rate.
The decision by the Reserve Bank of Zimbabwe to discard the allocation of foreign currency to local authorities for water provision and directing them to the use the interbank exchange rate has left many councils in crisis as far as the procurement of water purification chemicals was concerned.
“When we did our budgets, we were using the 1:1 rate and now we have to go on the market on a willing-buyer willing-seller rate, which makes budgeting for water provision quite difficult,” he said.
“We have been told not to rate our services, but when getting the US$ from banks, we are being rated. Mind you, when it comes to water supply, the idea is to recoup the cost of water purification and distribution.”
Government has given a greenlight to local authorities to craft supplementary budgets in view of the on-going economic crisis, but Chisango said that was not enough to mitigate the situation.
“The rate is not static and we would have to change the service fees regularly, something which is impossible. Yes, we are going to have a supplementary budget, but that is not enough,” the Harare town clerk said.
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